Despite a strong rebound since the recent April lows, Woodside Energy Group Ltd (ASX: WDS) shares remain down 16.6% over the past 12 months.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed on Friday trading for $23.72. Shares are currently changing hands for $23.56 apiece, down from $28.25 a year ago.
But those losses will have been significantly mitigated by the two fully franked dividends the oil and gas company has paid out over the year.
Those dividends added up to a rounded $1.87 a share. This sees Woodside stock trading on a fully franked 7.9% trailing dividend yield.
So, are Woodside shares now a buy for their outsized passive income?
Image source: Getty Images
Are Woodside shares a good buy for their passive income?
Peak Asset Management's Niv Dagan recently ran his slide rule over the Aussie energy company (courtesy of The Bull).
"The share price of this global energy giant recently rose on higher crude oil prices driven by escalating Middle East tension," Dagan noted. He added that Woodside shares "then fell on retreating crude oil prices in response to a possible ceasefire between Iran and Israel".
Indeed, Brent crude oil prices hit US$78.85 a barrel on 19 June. That was up from recent lows of just US$60.23 per barrel on 5 May. But as Dagan noted, an easing of tensions in the oil-rich Middle East over the past week has seen the Brent crude oil price slide back to US$67.57 per barrel.
But the increased spectre of potential conflicts in the region hasn't derailed Woodside from its core focus.
According to Dagan:
Geopolitical risks aside, Woodside delivered a strong operating performance in full year 2024, generating record production of 193.9 million barrels of oil equivalent underpinned by a top early performance at Sangomar.
The company has sustained production guidance of between 186 million and 196 million barrels of oil equivalent for full year 2025.
Other highlights from Woodside's 2024 full-year results included operating cash flow of $5.8 billion, down 5% year over year, and a cash margin of 82%, up from 80% in 2023.
As for that passive income, Dagan, who has a hold recommendation on Woodside shares, said:
The company paid a full year, fully franked dividend of $US1.22 a share in full year 2024 and maintained a payout ratio at the top of the target range at 80%.
This adds to a hold case, keeping in mind the geopolitical risks.
